This morning, a vastly expansive essay by Lew Spellman of the University of Texas in Austin titled "Warren Buffett and the New Calculus of Gold [4]" is making the rounds, and while the narrative is largely defensive of gold, and its role as the only true safe collateral in a world rapidly depleted of the latter (as we have been arguing for the past 2 years) as proven over and over by the fact that the entire modern system now relies more on re-re-re-rehypothection of existing collateral than on spending money for CapEx purposes and to replace an aging asset base, we wonder: is this realization really just now being grasped by the world? Are the forward thinkers of the world only now understanding that in a world with hundreds of trillions of imaginary collateral whose ultimate owner will never be tracked down, and a daisy-chained bankrupt domino collapse will come before anyone finds out who owns what (much in the same was as MF Global is a symptom [5] of the entire modern financial system), only that which is tangible, undilutible and real will have value? Finally, is the avant-garde of Keynesian thought only now (re)discovering the Exter inverted pyramid [6]? Because one can spend 30 minutes reading the Spellman essay, or... cast a quick glance at the picture below to understand the true value of everything in a world in which the monetary fabulation of the past 99 years is finally unwinding.
One picture in this case is absolutely worth well over a thousand words.
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